Reward money earned by tax officials exceeds their total salaries drawn over last 10 years

They are luckier than most other government servants in at least one respect - reward money. In the last 15 months, over 700 officers of the Directorate of Revenue Intelligence (DRI) and Central Customs and Excise Department have raked in about Rs 2 crore over and above their pay for nabbing economic offenders or smugglers of contraband gold, textiles, electronics, hashish and heroin worth over Rs 300 crore in the open market.

In some cases, the reward money earned has exceeded their total salaries drawn over the last 10 years, and in a majority of cases the interest earned on the reward money is four to five times higher than their take-home salaries. The handsome rewards can largely be attributed to the drive launched by the Finance Ministry to make smuggling a high-risk low-profit venture. Officers are now entitled to a tax-free 20 per cent of the total value of seized contraband - which in one stroke has eliminated the chance of their being tempted by the 1 per cent offered by smugglers (operating on a 200-300 per cent profit margin) to look the other way.

That the move has paid rich dividends is evident in the phenomenal spurt in seizures of contraband goods since April last when the new guidelines went into effect. From a meagre Rs 66-crore worth of goods seized in 1982, the figure shot up to Rs 191-crore in 1985 and is likely to cross Rs 250 crore in 1986. Monetary rewards have similarly zoomed from Rs 60-lakh in 1982 to Rs 5.52 crore in 1985 and are likely to touch Rs 7 crore in 1986. Not surprisingly, there ward-takers have included officers from the rank of assistant director downwards to humble peons and drivers. Some examples:

Ravindra Nath Kakkar

Tops the list of award winners with Rs 10.48 lakh. In November 1985, he seized 602 kg of heroin and 4,565 kg of hashish worth Rs 8.77 crore from a heavily near Bombay.

Ravindra Nath Kakkar, 50, an assistant director with the DRI in Bombay, tops the list of award winners with Rs 10.48 lakh. Fortune smiled on him in November 1985 when he, at considerable risk to his life, seized 602 kg of heroin and 4,565 kg of hashish worth Rs 8.77 crore from a heavily guarded farmhouse in Talasari near Bombay. The reward of Rs 5 lakh was followed by another of Rs 2 lakh some months later when he, as a member of a raiding party, recovered gold worth over Rs 4.77 crore in suburban Jogeshwari. With that, his income pattern improved considerably and, despite a salary of Rs 3,200, he now owns a second-hand air-conditioned Premier Padmini car.

A father of two, Kakkar lives in a modestly furnished 1,500 sq ft government flat in Matunga and has invested a major part of the reward money in national savings certificates and fixed deposits in nationalised banks and expects his investments to double in the next five years. He plans to invest the rest in a flat in Bombay. Says the former army officer who joined the Customs Department as an appraiser in 1959: "I have done nothing I should not have done as an official of the DRI. But we are grateful to the Government for this scheme which insulates us against any other allurements. Even if I die now my family will not be starved of money. What else does a government employee want?"

J.E.A. Saldanha, 53, a stoutly built assistant director in the DRI, had a fairly uneventful career till April 12, 1985 when he notched up an impressive Rs 8.66 lakh in rewards for the recovery of smuggled goods. Acting on a tip-off that an Ambassador car laden with contraband would pass through Bombay. Saldanha, aided by a small posse, intercepted the car.

J.E.A. Saldanha

On April 12, 1985, he made an impressive Rs 8.66 lakh in rewards. His career-best effort was recovering gold worth over Rs 3 crore concealed in an Ambassador car in Bombay.

A preliminary search drew a blank but a closer inspection revealed a curious forging under the rear seat. It turned out to be a cavity filled with 12,000 tolas of gold worth over Rs 3 crore. For this career-best effort, Saldanha was sanctioned an advance award of Rs 5 lakh which was later raised to Rs 8 lakh - an unprecedented sum when his career till date had brought him only a piffling Rs 19,500 as reward.

Unlike most of his colleagues, Saldanha lives in a 425 sq ft flat in Mayfair Apartments which he bought for Rs 14,000 in 1965. His major concern is ensuring a secure future for his family. He has invested his money in fixed deposits, national savings certificates, Unit Trust of India and in private firms. He earns about Rs 8,000 per month from these investments which is more than twice his monthly salary of Rs 3,200.

Says Saldanha: "The Government has recognised that those working in sensitive departments have to be given extra encouragement for an additional risk involved in their job. It is not a commission but a premium on risk which helps us in taking more initiative and risk." Parsimonious by nature, Saldanha has no intentions of moving out of his modest flat and still has no car, preferring to save money.

B.G.N. Iyengar, 55, an assistant director heading the DRI's intelligence cell in Bombay, has over the last 18 months, been associated with 14 major cases in which contraband worth over Rs 7.82 crore was seized. His share of the 20 per cent reward worked out to Rs 7.15 lakh. This soft-spoken Brahmin from Karnataka has been awarded the President's Medal twice for distinguished service. He came within a hair's breadth of losing his life in 1982 when fleeing contraband runners fired at him, injuring him in the mouth. For his bra very he was sanctioned Rs 10,000. Earlier, in 1977, he nabbed a Swiss-German at Bombay airport and recovered from him diamonds worth Rs 60 lakh for which he received an award of Rs 6,000.

S. Vishwanathan

Posted at Madras airport, he heads the list among the junior officers with Rs 5.50 lakh as reward. In February this year, he recovered gold worth Rs 36 lakh concealed in a Suzuki generator.

But under the new rules he has received much bigger amounts. His largest reward, Rs 3 lakh, was for the seizure of a textile and video cassette recorder consignment worth over Rs 1.98 crore last year in Bombay. And in May this year, he netted Rs 1.50 lakh for his role in the seizure of a gold consignment worth Rs 1.20 crore also in Bombay. Iyengar lives in a 500 sq ft apartment in Versova, and commutes by train. He too has invested his award money in government bonds and securities and plans to return to his home state upon retirement. Says Iyengar: "This is a temporary arrangement. I want to settle in Mysore and would like to buy property there. Till then I think I will have to keep money in places from where I can draw immediately. Nothing better could have happened to an officer at the fag-end of his career."

S. Vishwanathan, 34, is a customs intelligence officer posted at Madras airport, who, with Rs 5.50 lakh in reward money, tops the list among the junior officers. During the last 15 months, he seized gold consignments worth Rs 2 crore from air passengers. He struck gold, literally, when his observant eye chanced upon a passenger from Sharjah smoking cigarettes as though they were going out of style. Suspicions aroused, Vishwanathan asked him to open a large box. The box contained steel stools whose wooden tops seemed rather heavy. When broken, they were found to contain gold worth Rs 15 lakh. Two days later, he intercepted a Singaporean national with a plaster on both legs. He seemed innocent enough until a baggage search revealed a plaster roll. Vishwanathan promptly had the plaster on his legs taken apart, recovering 1 kg of gold. For these seizures, Vishwanathan got an advance award of Rs 1.50 lakh.

B.G.N Iyengar

Awarded the President's Medal twice for distinguished service, Iyengar helped break open last 18 months, in which contraband worth over Rs 7.82 crore was seized.

Vishwanathan, who has built up exhaustive dossiers on contraband runners, was one of the customs officers seriously injured in the bomb blast at Madras airport last year. Hospitalised for over 40 days, he went back to work with a vengeance and in February this year recovered gold worth Rs 36 lakh concealed in a Suzuki generator. But his newly-acquired affluence has not changed his life-style. He still lives in a small house in the Tambaran area with his mother and sister and goes to office on a moped. Says Vishwanathan: "I have invested the money in government securities and national savings certificates. I had started the construction of a house but could not complete it. Now I have completed it with the money I have received." Vishwanathan's salary of Rs 2,000 is just enough for his needs.

Syed Mohammed Nisar, 55, is the only officer of the rank of superintendent in the DRI to receive Rs 5 lakh for a single seizure. Posted at Trichy, Nisar succeeded in breaking a gold smuggling network operating in Coimbatore. Putting his extensive underworld contacts to good use, Nisar ordered the impounding of a Thai ship and the detention of its crew. Their interrogation and a week-long surveillance of suspected gold smugglers in Coimbatore and Madras led to the recovery of 87 kg of gold from an Ambassador parked in a hotel. With 30 years of service behind him, Nisar's total reward before the new rules came in hardly exceeded Rs 20,000 but the latest seizure alone brought him over Rs 5 lakh.

With two daughters to marry off, Nisar intends to use part of the money for that purpose. He is also planning to take his mother and wife for the Haj. And of what is left, says Nisar: "I will improve my ancestral property in Coimbatore."

S. Jayant, 34, received Rs 4.75 lakh as reward for the role he played in the Coimbatore gold smuggling case. His wife Uma has already bought gold jewellery worth Rs 10,000. He also plans to move out of his on e-room flat in a poor section of Madras. "I want to move out of this area and have given some advance for a flat which will cost me about four lakh," he says.

S. Jayant

Received Rs 4.75 lakh as his share in Coimbatore gold smuggling case where 87 kg of gold was recovered from a car parked in a hotel. Jayant plans to move out of his one-room flat in Madras.

The big rewards at stake have brought in their wake a very human problem - professional jealousy. To keep it in check senior officers make it a point to associate as many officers as possible when a big seizure is in the offing. Thus M.S. Agharker, C.L.Mathew and K. Raghavan - all of the Bombay DRI - split the reward for busting a Jamnagar-based smugglers' gang. Earlier, only Agharker and Mathew were involved but later, when the time for breaking up the operation came, Raghavan was brought in for his skill at handling such a raid.

While the reward scheme applies to all officials working for the Finance Ministry, officers of the DRI have netted the most. Against an average seizure of Rs 7 crore during 1983-1984, DRI investigators seized contraband worth over Rs 48 crore out of the total recovery of Rs 188 crore in 1985. And they repeated their performance in 1986, seizing half the value of the total smuggled goods worth over Rs 75 crore during the first quarter of the year itself. The money winners include inspectors, constables and peons. At the DRI office in Madras, all 14 intelligence officers, two assistant directors, two superintendents, two drivers and four sepoys have benefited. Says Deputy Director S. Venkatdri: "In all major cases each one of us has a role to play. While the case is followed and finally solved by one or two officials, they alone cannot handle all the paper work and the post-operation investigations. Others have to be suitably rewarded so that it encourages team spirit and avoids heartburning."

What is cause for concern, however, is the complaints of harassment pouring in from air and sea passengers and business houses. Opinion in industry and the foreign travel trade feels that customs officers are shooting in the dark to earn rewards. But Jyotirmoy Dutta, chairman, Central Board of Excise and Customs says emphatically: "We simply can't call a scheme a bad one because it has caused avoidable problem for a very small number of people. We always take strong action if the complaint is genuine and each officer is responsible for his action. He can be a faulter once but not twice."

Finance Minister V.P. Singh, the architect of the scheme, is also its strongest votary. As he puts it: "So what if some officials who play an active role in curbing anti-national activities and recover more revenue get rewarded in the process? Let them feel that the Government can also ensure their affluent growth and they need not depend on shady arrangements." Says DRI Director-General B.B. Kumar: "The finance minister has created an environment in which smuggling has become uneconomical. If officers are sure of getting enough financial incentives they will plug and choke the sources generating black money."

But the fact is that the new arrangements are a mixed blessing. The hunt for rewards has bred unhealthy competition among officials working in the Customs and Excise Department and also created deep jealousies among senior officers excluded from the rewards scheme. Officers above the rank of assistant director or assistant collector who actually supervise the investigations, are sore over being kept out. In fact, the finance minister, while approving the scheme, had not excluded any officer from it but some last minute bureaucratic jugglery ruled them out of the entire scheme. Amusingly, North Block has been flooded with requests from income tax and excise officials seeking postings in the DRI or customs because their normal run of work does not necessarily lead to such rewards.

What many of the hopefuls fail to realise is that very often a big seizure may elude their grasp by the proverbial whisker. In fact, last year a team of DRI officers in Goa intercepted and impounded a boat carrying contraband gold and other goods. Kakkarand another officer, Patanker, were escorting the boat and its Pakistani crew back to Bombay in rough seas. Suddenly, the boat with the confiscated goods collided with a fisherman's boat and sank.

The DRI officers also got lost and after a seven-hour ordeal, managed to land in Gujarat - thanks ironically to the navigation skills of one of the Pakistani smugglers they had arrested. In the old days a loss of life in such circumstances would have spelt financial ruin for an officer's family. But in the wake of the new policy, officers are willing to take greater risks not only because of greater rewards but also because they have less reason to worry that their families will fall into penury in case they are killed or injured.

AWARDS: BIG BOOST

The new rates of monetary rewards for customs, excise and other economic intelligence agency employees and informants were introduced in March 1985. The incentive scheme, finalised after three years of file pushing, replaced the earlier provisions in which officials were entitled to a paltry award ranging from Rs 80 for every haul of gold worth Rs 2,000. No awards were given for the recovery of contraband like hashish, electronics, textiles or heroin.

The new guidelines not only raised the amount of reward to 20 per cent of the market value of the goods recovered, but also extended the eligibility for the bonanza to all employees working in the Income Tax Department, Enforcement Directorate and Excise Department. The new rules also provide that all those who haul in illegal arms and ammunition, foreign exchange, or seize goods on which government duties were evaded, will also be rewarded.

To boost morale further, the finance minister has decreed that revenue collectors should be paid at least 50 per cent of the estimated reward money within two weeks of recovery and the rest soon after cases are settled in court or within concerned departments.

Under the guidelines for the actual disbursement of the reward money, the authorities are asked to keep in mind the "specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informers, the risk involved for government servants in working out a case, the difficulty in securing information", among other factors.

The idea behind this directive is to distribute the total reward money in such a way that all those who worked as a team in a case are suitably rewarded while those who played a major role receive more than the others. Says Jyotirmoy Dutta, chairman, Central Board of Excise and Customs: "We are conscious of the fact that some officials do deserve more than the others and they should be paid more so that others can compete with them."

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